The Kodak Failure: The Innovation They Created But Feared to Launch

Few business failures are as rich with leadership lessons as the story of Kodak. The irony is legendary: Kodak invented the digital camera in 1975, only to bury it to protect its film business. This wasn’t a technical failure. It was a failure of courage, identity, and vision. It was a failure of leadership.

Today, the Kodak failure is cited in every innovation course and disruption playbook. But its real value lies not in hindsight critique—it lies in the mirror it holds up for today’s emerging leaders. The very behaviors that doomed Kodak remain common: protecting what made you successful, dismissing ideas that feel dangerous, and avoiding transformation because it makes the present uncomfortable.

Kodak Before the Fall

For much of the 20th century, Kodak was synonymous with photography. The company dominated film, cameras, and photo processing. It was globally respected, deeply profitable, and culturally iconic. The phrase “Kodak moment” became a household expression.

In 1975, Kodak engineer Steve Sasson developed the world’s first digital camera prototype. It was the size of a toaster and took black-and-white images at a resolution of 0.01 megapixels. But it worked. And Sasson knew it was the future.

When he presented it to executives, their response was chillingly short-sighted: “That’s cute. But don’t tell anyone.” They feared it would cannibalize their highly profitable film business. And they were right. It would have. But that was exactly why they needed to lead the disruption themselves.

The Leadership Breakdown During the Kodak Failure

Kodak’s failure wasn’t about strategy. It was about psychology. Here’s what emerging leaders can learn from it:

1. Success Can Be the Enemy of Adaptation

When a company is thriving, it becomes emotionally invested in the status quo. Kodak leadership had built an empire on film. Their confidence in that model blinded them to what was next.

2. Fear of Cannibalization Delays Transformation

Leaders often ask, “What will we lose if we change?” when the better question is, “What will we lose if we don’t?” Kodak saw digital as a threat to film, not as a path to future dominance.

3. Innovation Without Sponsorship Dies in Silence

Even though Kodak developed several digital technologies early, none of them had executive sponsorship. Without leadership alignment, even the best ideas remain dormant.

4. Legacy Thinking Limits Identity Flexibility

Kodak believed it was in the film business. They failed to reframe themselves as being in the memories business, or the imaging business. When leaders define themselves too narrowly, they miss broader opportunities.

Case Study: Fujifilm’s Adaptive Reinvention

Contrast Kodak with Fujifilm. Also rooted in film, Fujifilm faced the same disruptive wave. But instead of doubling down on legacy, their leadership diversified. They invested in digital imaging early, explored adjacent industries (like medical imaging and cosmetics), and restructured aggressively.

Today, Fujifilm is a thriving, diversified company. The difference? Leadership that was willing to rethink its identity and act before urgency made the decision for them.

What Emerging Leaders Must Internalize

Kodak’s collapse is not just a cautionary tale. It’s a call to reflection. If you are leading something successful today, you are already at risk of this mindset trap.

1. Innovation Is a Leadership Discipline

It must be practiced, sponsored, and integrated into the decision-making process. Innovation cannot live in a lab. It must be visible on the leadership agenda.

2. Identity Flexibility Builds Strategic Durability

Leaders must be willing to redefine what business they are in—not just in words, but in strategy, in structure, and in investment.

3. Disruption Is Inevitable—Control What You Can

You cannot stop the wave of innovation. But you can decide whether you ride it early or get swept under it later. The cost of early movement is uncertainty. The cost of delay is irrelevance.

4. Protecting the Past Costs the Future

Every time a leader avoids disruption to preserve legacy systems, they are mortgaging future relevance. The most courageous decision might be to actively threaten your own success.

Questions for Reflection

• Where are you over-identifying with a current success model

• What disruptive opportunity might you be quietly avoiding

• Are you defining your value too narrowly based on past performance

Actionable Exercise

Choose one product, process, or behavior you lead that is currently working well. Imagine a competitor launches something tomorrow that makes it obsolete. What would you do? Use that imagined urgency to outline three steps you can take now—before it’s forced on you.

Closing Thoughts

The Kodak failure wasn’t about the camera. It was about the culture. It was about leadership that looked at the future and blinked. Today’s leaders face similar crossroads every day. You don’t have to predict perfectly—but you do have to move boldly. The companies and careers that endure are not the ones that cling to their prime. They are the ones willing to evolve before they are forced to.